Take-Two stock dropped more than 15% in extended trading on Monday after the company reported fiscal second-quarter 2023 results. It said its outlook in the current quarter and for fiscal 2023 would be lower than previously expected.
Here’s how the company did:
- Loss: $1.54 loss per share
- Revenue: $1.5 billion, vs. $1.55 billion as expected by analysts, according to Refinitiv
Take-Two said in a statement that its fiscal 2023 net bookings would come in between $5.4 billion and $5.5 billion, lower than the company’s previous expectations of $5.77 billion at the midpoint.
Analysts surveyed by Refinitiv expected $5.88 billion in sales for the year. Take-Two’s net bookings primarily includes digital game sales or sales to wholesalers, as well as licensing fees and merchandise.
It also said it expects a fiscal year ending March 31, 2023 net loss between $674 million to $631 million, worse than the guidance of a net loss between $438 million to $398 million that it provided in its first-quarter earnings.
Take-Two’s slashed outlook comes as gaming slows, and particularly games on mobile devices like smartphones, after two years of elevated sales and engagement thanks to the Covid-19 pandemic. Game sales are also being hurt as consumer confidence falls in the face of rising interest rates and a possible recession.
“Our reduced forecast reflects shifts in our pipeline, fluctuations in FX rates, and a more cautious view of the current macroeconomic backdrop, particularly in mobile,” Take-Two CEO Strauss Zelnick said in a statement.
Take-Two is known for games including “Grand Theft Auto” and its “NBA 2K” series. In September, a hacker published some files including the source code of the company’s unreleased and highly anticipated title “Grand Theft Auto 6.”
Take-Two also owns mobile giant Zynga, known for “Words with Friends,” after purchasing it for $12.7 billion earlier this year.